By Attorney Steve Shropshire and Paralegal Joseph Schaefer
In spring 2014, the Environmental Protection Agency (“EPA”) published its draft “Waters of the U.S.” rule for public comment. The rule would redefine which waters are subject to federal regulation—commonly known as jurisdictional waters—and greatly increase the areas subject to federal jurisdiction and permits. Despite significant controversy and an extension of the initial comment deadline to October 20, 2014, the EPA has pushed forward with the proposed rule. This issue is of interest to a broad community of stakeholders because the jurisdictional waters definition determines who must apply for Clean Water Act permits, including Section 404 permits governing activities in jurisdictional wetlands. If adopted, the rule would require many government agencies and real estate developers to obtain those permits for the first time, substantially increasing the time and expense required for project approvals.
Since Supreme Court rulings in 2001 and 2006, which limited the EPA’s authority to regulate isolated waters—waters that do not fall within the clear boundaries of federal jurisdiction—the EPA and the regulated community have wrestled over which isolated “other waters” are jurisdictional. The EPA now proposes to expand on language from a Supreme Court opinion written by Justice Kennedy—an opinion that was not signed by any other justice—to redefine jurisdictional waters. Critics argue, however, that with its rule, EPA is taking liberties to secure federal jurisdiction well beyond what Justice Kennedy ever intended. According to the EPA and the Army Corps of Engineers (“Corps”), 17 percent of “other waters” would now be classified as jurisdictional under proposed changes.
The EPA insists that it is not expanding its regulatory reach, but rather is clarifying uncertainties that followed the court decisions. At the same time, the EPA acknowledges the rule would increase the percentage of all waters definitely subject to regulation by 3 percent, which includes about 17 percent of the “other waters” with previous uncertain status. It does this by expressly regulating waters “adjacent” to a jurisdictional water, and by then defining “adjacent” to include “neighboring.”
It also extends the EPA’s regulatory reach by expanding the definition of “other waters.” The new definition includes waters that, “in combination with other similarly situated waters, including wetlands, located in the same region, have a significant nexus to” a regulated water. A “region” includes “the watershed that drains to” a jurisdictional water, and the “significant nexus” includes any other waters that “can be evaluated as a single landscape unit with regard to their effect” on jurisdictional waters.
When strung together, these definitions can include any waters within a watershed that are not expressly exempted from the Clean Water Act, because all waters “in combination with other” waters not only have a nexus to, but become, the large rivers that are regulated, once the water percolates or runs downhill. The exemptions are focused on agricultural uses, but many in the agricultural sector fear that existing agricultural exemptions to the Clean Water Act will be lost or altered by the proposed rule. For other sectors, the new definitions would expand what is regulated, leading to significant new regulatory challenges.
Many stakeholders and members of Congress have asked the EPA and the Corps to provide standards, such as measureable flow rates or specific ecological functions for “other waters,” to qualify as having a significant nexus to jurisdictional waters, but the agency has declined to do so in the proposed rule.
If the rule is adopted, most of the additional regulatory costs will fall on state and local government infrastructure projects, landowners who do not qualify for an agricultural exemption, real estate developers (and their tenants and buyers), and resource extraction industries. Some of these people are accustomed to Clean Water Act regulation of their projects, especially projects along or in the water. But those who typically work far away from larger water bodies are likely to discover that minor or isolated hydrologic features, such as a ditch that is only wet in the winter, is now of concern to the federal government.
On September 9, 2014, in response to stakeholder concerns, the U.S. House of Representatives passed H.R. 5078 to prevent the EPA from implementing the proposed rule. In a preemptive move, on September 8, 2014, the White House issued a Statement of Administration Policy stating the Administration strongly opposes H.R. 5078 and will recommend a Presidential veto it if it passes the Senate. This stance suggests that despite considerable opposition, the Administration continues to support the proposed rule, and that the rule is likely to be adopted sometime in 2015.